What Are Auto Pawn Loan Rollovers?

An auto pawn loan is a kind of loan where the collateral is a vehicle that the borrower owns. Many times, a driver can get a loan and keep their vehicle in the interim. However, the auto pawn loan rollover is something that should be avoided.

The rollover provides for a situation where a borrower could not pay the loan off during the agreed period, which is often short. The debt gets "rolled over", but often with new rules or higher interest rates. Interest on rollovers can rack up very quickly, and in many cases, the inability to pay ever higher bills leads to repossession. This is a very bad deal for the borrower, since lenders will generally only lend up to 50% of what the vehicle is worth. So, while an auto pawn loan can secure quick cash for a purchase, the auto pawn loan rollover is something to be avoided.